Zcash Vulnerability That Put Millions of Dollars of ZEC at Risk Has Been Fixed

A security researcher discovered a critical vulnerability in Zcash nodes that could have allowed malicious miners to drain more than 25,000 $ZEC from the network’s deprecated Sprout shielded pool—a sum worth about $6.5 million at writing.

Alex “Scalar” Sol disclosed the flaw on March 23, according to a disclosure report released Tuesday, revealing that zcashd nodes were skipping proof verification for transactions involving the legacy Sprout pool. The bug was not exploited and all users’ funds remain safe, according to the disclosure.

The vulnerability spanned releases from July 2020 through the present, with Zcash developers releasing v6.12.0 on Tuesday to contain the fix. Major mining pools moved quickly to patch their systems—Luxor mining pool confirmed deployment on March 25, while F2Pool, ViaBTC, and AntPool all deployed the fix by March 26, according to the same report.

The Zebra full node implementation was not affected by the vulnerability, the report said, and would have triggered a chain fork if exploitation had been attempted, providing an additional layer of network protection.

Sol, who discovered the vulnerability using AI assistance, reported it to Shielded Labs on March 23. The organization coordinated with the Zcash Open Development Lab (ZODL), whose engineer Jack “str4d” Grigg authored the patch.

For his disclosure, Sol will receive a 200 $ZEC total bounty—valued above $51,000—with Shielded Labs, ZODL, the Zcash Foundation, and Bootstrap each contributing 50 $ZEC.

The Sprout pool was closed to new deposits in November 2020, making it a deprecated but still-active component holding approximately 25,424 $ZEC that users have not yet migrated to newer shielded pool versions.

While the vulnerability could have allowed draining these funds, the Zcash Open Development Team (ZODL) said that Zcash’s “turnstile” mechanism would have prevented broader supply inflation. The turnstile requires that any coins leaving the Sprout pool must have verifiably entered it, creating a safeguard against the creation of new tokens beyond the network’s total circulation of around 16.63 million $ZEC.

This isn’t the first big vulnerability that the network has faced. Back in 2019, the network patched a bug described as an “infinite counterfeit” crypto generator, though it was patched out before becoming a major issue for the privacy coin network.

Zcash is the biggest gainer over the last 24 hours among the top 100 coins by market cap, per CoinGecko data, rising more than 14% to a recent price above $255. The price of the privacy coin skyrocketed last fall from a price of about $50 to a multi-year peak near $700, but has fallen alongside Bitcoin and other cryptocurrencies in recent months.